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NYC Criminal Defense Bribery Scandal: A Reminder About Referrals

By William Peacock, Esq. on October 15, 2014 | Last updated on March 21, 2019

Last month, three criminal defense lawyers and a paralegal were in need of one of their own after they were indicted for allegedly bribing court staff to pass along wealthy clients. Lawyers Dwane Smith, 56; Benjamin Yu, 36; and Jae Lee, 41; along with paralegal Jose Nunez, 47, were charged after the court staffer became a cooperating witness, reports the New York Daily News.

That probe expanded this week, when investigators' eyes turned to Yu's former mentor, 70-year-old attorney Paul Liber. Though Liber and his lawyer both point out that he has not been charged, his name came up repeatedly during the investigation, reports the New York Post.

A Simple Scandal

How simple can a scandal be? The three indicted lawyers, and their paralegal, allegedly paid a court staffer tens of thousands of dollars in kickbacks, and provided him with a cell phone, to steer cases their way. The staffer would interview defendants' families to determine whether they had the means to pay for pricey representation, and if so, would give them the attorneys' business cards. He also told them that they'd see a judge sooner if they had a private attorney.

Yu charged $1,500 per indictment, and nabbed as many as 100 clients. When he began to suspect that he was under surveillance, Yu started passing the referrals to Lee. Smith, who was indicted separately, paid up to $1,000 a pop for his referrals.

Nunez was the common thread: he first worked with Smith, then with Yu.

As for Liber, he has not been charged with any offense -- this might be suspicion by association, as he was Yu's mentor and co-counsel on previous cases. However, the Post did take the opportunity to air Liber's disciplinary record, which includes sleeping with a prospective client in the courthouse attorney's lounge, trying to sleep with a prospective client's sister in 1987, and more recently, calling two legal aid attorneys "f---ing c---s."

Remember: Paid Referrals Are an Ethical Mess

Obviously, what these guys were running was on the far end of the referral-to-bribery spectrum. But since your Professional Responsibility class and MPRE exams concluded a while back, you might be curious about where exactly the line is.

The ABA Model Rules, specifically Rule 5.4, generally prohibits paying runners, like the court staffer in the above case. Attorneys may pay the "usual charges of a legal service plan or a not-for-profit or qualified lawyer referral service" per Rule 7.2(b); again, this sure as heck doesn't qualify.

As for lawyers referring cases to other lawyers, Rule 1.5 (e) allows referral fees only if:

(1) The division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation;

(2) The client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and

(3) The total fee is reasonable.

Again, not the case here at all, but it's good to know for future reference. If you want to know more about fee-sharing, the ABA's Solo section has a great article on all the ins and outs.

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